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Cozy and quaint is grappling with formal and rigid in historic Washington Grove, where 100-year-old homes sit on small lots along car-less avenues and picturesque porches have long encroached on the public right-of-way.

For years, the town has operated with a live-and-let-live mindset and settled questions with handshakes, but the current mood of the housing market is forcing a change.

"The main issue is that banks are getting very nervous nowadays about people having a piece of a house on town property," said town Mayor Darryl Anderson.

"Because of the way the housing market has gone, the lenders and title companies are very concerned about the absolute propriety of what they are insuring," said Georgette Cole, who serves on the Town Council.

When the Grove was founded as a Methodist revival campground in 1873, small lots were carved into public land to accommodate 258 tents and the families who lived in them. Houses followed in the early 1900s. Today an undetermined number of homes have porches that sit on town property, facing a series of five non-drivable walkways known as the "avenues."

"Literally they've been that way since the early 1900s," said Cole. "They were built at a time when no one was really concerned about property lines."

Problems surfaced recently when a house at 315 Grove Ave., which faces a public walkway on Second Avenue, was being sold, Cole said.

"The title company didn't really understand why this had never really been explored before, and the town didn't understand why all of a sudden it was an issue," she said. "When the town was notified … it was pretty obvious that there was a problem."

Last month, the town held a public hearing to consider the future of two of those homes — and whether their owners should be allowed to buy the town property they sit on. The town is doing a survey to see how many of its 219 homes are affected.

Town leaders are accepting public comment and meets on the issue again on Oct. 15 and 27.

Last month's hearing began with the proposal that affected property owners be allowed to purchase several more feet in front of their property, so they would officially own their historic porches and have the rights to fix them — a solution that seemed an easy fix at first, Anderson said.

Then it became clear that a "nice straight line" through the center of town dividing public and private land "would become a very crooked line" and town residents would own part of the historic walkway, Anderson said.

Bob Booher of the town's Historic Preservation Committee told the council that the avenue walkways were "one of the most cherished part of our town," Anderson said, an essential part of town history. Moreover, attaining new deeds and re-filing them with mortgage companies could also cost property owners about $1,500, he said.

Town leaders are now considering the possibility of granting historic easements to properties with porches encroaching on public walkways. That way, residents could rebuild their porches to the same size in case of rot or fire, but ownership would belong to the Town of the Washington Grove.